Jacksonville Mayor Donna Deegan is proposing a $2 billion 2025-26 municipal operating budget with a roughly $110 million spending increase over the adopted 2024-25 version.
In a July 14 presentation to City Council, Deegan also proposed a five-year Capital Improvement Plan with $687 million in first-year spending, an increase of $198 million over what Deegan recommended and Council adopted in 2024.
Offering her third budget and CIP since being elected before the 2023-24 budget year, Deegan once again did not recommend an increase in the property tax rate. However, taxpayers whose property values increased would pay a higher tax bill.
Much of the new operating budget funding goes toward providing $100.1 million in salary and pension increases to Jacksonville Sheriff’s Office and Jacksonville Fire and Rescue Department employees, which Deegan and Council approved in 2024.
In her remarks to Council, Deegan said the increases had resulted in higher recruiting rates for emergency responders, with applications to JSO increasing by nearly 50%.
Budget priorities
Among other priorities, Deegan listed:
• $51 million for roadway surfacing, sidewalk repair and installation and intersection improvements, up 64% from current funding levels. Deegan is proposing $2.6 million in upgrades for city-owned buildings, $1 million for litter and blight reduction and $20.4 million for drainage work.
• $56 million for UF Health to pay for care for vulnerable residents and $7.1 million for public health programs such as telehealth services, dental care access and pediatric mental health.
• Nearly $65 million to fulfill commitments for grants for Downtown Investment Authority projects and economic development elsewhere in the city.
• $86.5 million for Downtown riverfront parks construction and $26 million for park improvements elsewhere.
• $49.8 million for Kids Hope Alliance programming, $8.7 million to Edward Waters University and $1.4 million in library renovations to foster improvements for youth, literacy and higher education.
• $12 million in affordable housing and homelessness programs.
• $6.5 million in Community Benefits Agreement funding, including $4 million for the Eastside community and $2.5 million countywide. The agreement was attached to the deal between the city and Jacksonville Jaguars to provide public funding to transform EverBank Stadium into the team’s “Stadium of the Future.”
• $18.1 million in new fire station construction and $1.6 million for new JSO equipment and seven support positions.
Citing government-related progress such as the stadium deal and approval of an agreement paving the way for development of the University of Florida graduate campus in LaVilla, Deegan said her budget would support growth while providing essential services.
“Today we don’t just have cranes in the air, we have a feeling of optimism,” she said.
“Where we once were a city of renderings and potential, we are now a city of construction and achievement. This isn’t a time to pat ourselves on the back and slow down. It’s time to lengthen our stride.”
No reserve spending
Unlike Deegan’s 2024-25 budget, the new version does not draw from city reserves. In 2024, Deegan recommended spending $47 million in reserve funding, which became a flash point of friction between her administration and some Council members.
Council, in its adopted budget, eliminated most of that reserve spending.
Deegan said the reason she did not recommend dipping into reserves this year was partly because of an $88 million increase in property tax revenue brought on by new construction and higher valuation of existing properties.
Another factor was a $40 million, one-time contribution from not-for-profit city utility JEA, which annually provides a portion of its revenue to the city.
Deegan said the JEA contribution would go toward fulfilling city commitments that include economic development and Downtown revitalization grants, a new burn building for the Jacksonville Fire and Rescue Department, and Council strategic initiatives.
Although spending is up in the operating budget, Deegan said the city is not adding personnel. Rather, she said, employees have been shifted from lower- to higher-priority positions.
Capital improvement spending
Regarding the increase in CIP spending, Deegan said the administration would “close the list” to new debt-funded projects for the next few years while focusing on “pay-go” projects that can be paid with city revenue versus borrowed funding.
She said the five-year CIP contains $2.5 billion worth of projects, while the city has the capacity to complete about $250 million worth per year.
“If we added nothing new, it would take us up to 10 years to get it all done,” she said.
“Adding new projects means adding new debt. Doing that without adding capacity to get those projects completed in a reasonable time frame hurts our financial health.”
What’s next
With Deegan’s budget in hand, the Council Finance Committee and other standing committees will dissect it and likely make changes before sending it to the full Council for a vote. Under the city charter, the committees must deliver their version of the budget by the first Council meeting in September, and Council must approve it by the second meeting of that month in advance of the start of the city’s fiscal year Oct. 1.
Council member Will Lahnen, a member of the Finance Committee, said he was pleased that Deegan’s budget did not include a millage rate increase and provided funding for public safety. He said that although he and his colleagues had yet to dig into Deegan’s recommendations, he was also pleased that the administration budgeted for more than $40 million in incentives coming due for DIA and economic development projects, for which Council previously had to dip into reserves to pay.
Lahnen has referred to upcoming payments for those projects as a “cash incentive cliff” that threatened to drive the city into deficits. He said that according to Council auditors, the city’s reserves had shrunk from $416 million in September 2023 to a projected $340 million this year.
Lahnen said it appeared Deegan’s budget increased city employees by a net of six positions, with those being for first responders.
“The bottom line is that we all heard things we liked,” he said. “If you want to put something from me in bold and all caps, it’s that there’s no use of the general fund (reserves),” he said.
Council member Ron Salem, former chair of the Finance Committee, said he also was pleased to see that Deegan did not draw upon the general fund reserves. However, he said he was concerned by the recommendation to spend the entire $40 million JEA contribution in one year.
Salem said he had advocated for spreading the contribution out over four years to help pay for additional years' worth of expenditures for the police and fire pensions.
In September 2024, Council adopted a $1.88 billion general fund budget that increased operational funding by 7.1% over the $1.75 billion version approved for 2023-24.
At that time, Council also approved a five-year capital improvement plan that included $489 million in first-year spending.
Deegan’s proposed budget would hold the line on the city’s millage rate – the property tax rate – at 11.31 mills. A mill is $1 of tax per $1,000 of assessed property valuation.
Deficit fears
Deegan’s budget presentation came toward the end of a fiscal year in which Council members raised concerns about pending deficits identified by Council auditors. During the 2024-25 budget process, auditors warned that deficits could climb to $105 million in the next four cycles.
Council members addressed those concerns in various ways.
Member Ron Salem instigated the Special Committee on Duval DOGE, a panel modeled after the Trump administration’s cost-cutting initiative. That committee identified more than $25 million in unspent funds in the city budget, including funding that had been committed to capital projects but never expended.
Among other key budget measures, Council voted 11-7 on legislation to end a city subsidy to provide residential trash hauling service.
The legislation, introduced by Council member Matt Carlucci, was designed to head off the rising cost of an annual “loan” that Council had used to artificially freeze the cost of the service for residents. Council auditors said the loan cost had grown to $36 million in 2024 and was on track to surpass $500 million by 2031.